Examination Paper: International
Business Management
1
IIBM Institute of Business
Management
IIBM Institute
of Business Management
Examination
Paper MM.100
International
Business Management
Section A:
Objective Type (30 marks)
· This section
consists of multiple choice questions and short answer type questions.
· Answer all the
questions.
· Part One carries
1 mark each and Part Two question carries 5 marks each.
Part One:
Multiple
choices:
1. What is the series
consideration for strategy implementation?
a. Strategic orientation
b. Location
c. Dimensions
d. Both (a) & (b)
2. The major activity in global
marketing is:
a. Pricing policies
b. Product lines
c. Market assessment
d. All of the above
3. The third ‘P’ in the
international marketing mix is:
a. Product
b. Price
c. Promotion
d. Place
4. The European Economic
Community was established in:
a. 1958
b. 1975
c. 1967
d. 1957
5. Environment Protection Act:
a. 1986
b. 1967
c. 1990
d. None of the above
6. People’s attitude toward time
depend on:
a. Language
b. Relationship
c. Culture
Examination Paper: International
Business Management
2
IIBM Institute of Business
Management
d. All of the above
7. Culture necessitates adaption
of :
a. Product
b. Price
c. Promotion
d. Place
8. The legal term for brand is:
a. Symbol
b. Name
c. Trade mark
d. All of the above
9. FDI flows are often a
reflection of rivalry among firms in:
a. Global market
b. Indian market
c. International market
d. None of the above
10. ISO certification is:
a. Expensive process
b. Elaborate process
c. Evaluative Process
d. Both (a) & (b)
Part Two:
1. What do you understand by
‘Inward-oriented Policies’?
2. What is ‘Factor Endowments
Theory’?
3. Explain the term
‘Totalitarianism’.
4. Write about ‘Persistent
Dumping’.
END OF SECTION A
Examination Paper: International
Business Management
3
IIBM Institute of Business
Management
Section B:
Caselets (40 marks)
· This section
consists of Caselets.
· Answer all the
questions.
· Each Caselet
carries 20 marks.
· Detailed
information should form the part of your answer (Word limit 150 to 200 words).
Caselet 1
THE EU’S LAGGING
COMPETITIVENESS
In a report produced for the
European Commission, published in November 1998, it was argued that
the EU lags behind the USA and
Japan on most measures of international competitiveness. Gross
domestic product per capita,
sometimes used as an indicator of international competitiveness at the
country level, was 33 per cent
lower in the EU as a whole than in the USA and 13 per cent lower
than in Japan. The EU’s poor
record in creating employment was singled out for particular criticism.
As this appeared to apply across
the board in most industrial sectors, it suggested that the EU’s poor
performance related to the
business environment in general and, in particular, to the inflexibility of
Europe’s labour markets for goods
and services. A shortage of risk capital for advanced
technological development and
high cost and inefficiency of Europe’s financial services were also
highlighted by the report. For
one reason or another, European industries generally lag behind in
technology industries. If
measured by the number of inventions patented in at least two countries, the
USA is well ahead of most
European countries, as well as Japan. Despite these shortcomings, the
report’s authors focus attention
on flexible markets, market liberalisation, and the creation of a
competitive business environment
rather than on targeted intervention by the EU or national
authorities
Questions:
1. Is gross domestic product per
capita a useful indicator of International competitiveness in the EU?
2. Is it fair to point the blame
for the EU’s poor international competitiveness at inflexible labour
markets, regulated goods and
services markets, and a general lack of competition? What
alternative explanations might be
suggested?
Caselet 2
PERU
Peru is located on the west coast
of South America. It is the third largest nation of the continent (after
Brazil and Argentina), and covers
almost 500,000 square miles (about 14 per cent of the size of the
United States). The land has
enormous contrasts, with a desert (drier than the Sahara), the towering
snow-capped Andes mountains,
sparkling grass-covered plateaus, and thick rain forests. Peru has
approximately 27 million people,
of which about 20 per cent live in Lima, the capital. More Indians
(one half of the population) live
in Peru than in any other country in the western hemisphere. The
ancestors of Peru’s Indians were
the famous Incas, who built a great empire. The rest of the
population is mixed and a small
percentage is white. The economy depends heavily on agriculture,
fishing, mining, and services.
GDP is approximately $115 billion and per capita income in recent
years has been around $4,300. In
recent years the economy has gained some relative strength and
multinationals are now beginning
to consider investing in the country. One of these potential
investors is a large New York
based that is considering a $25 million loan to the owner of a Peruvian
fishing fleet. The owner wants to
refurbish the fleet and add one more ship. During the 1970s, the
Examination Paper: International
Business Management
4
IIBM Institute of Business
Management
Peruvian government nationalised
a number of industries and factories and began running them for
the profit of the state. In most
cases, these state-run ventures became disasters. In the late 1970s, the
fishing fleet owner was given back
his ships and are getting old and he needs an influx of capital to
make repairs and add new
technology. As he explained it to the NEW YORK banker: “fishing is no
longer just un art. There is a
great deal of technology involved. And to keep costs low and be
competitive on the world market ,
you have to have the latest equipment for both locating as well
as catching and then loading and
unloading the fish.”Having reviewed the fleet owner’ operation, the
large multinational bank believes
that the loan is justified. The financial institution is concerned ,
however , that the Peruvian
government might step in during the next couple of years and again
take over the business . If this
were to happen, it might take an additional decade, for the loan to be
repaid. If the government were to
allow the fleet owner to operate the fleet the way he has over the
last decade, the loan could be
rapid within seven years. Right now, the bank is deciding on the
specific terms of the agreement.
Once these have been worked out , either a loan officer will fly
down to lima and close the deal
or the owner will be asked to come to NEW YORK for the signing.
Whichever approach is used, the
bank realize that final adjustments in the agreement will have
to be made on the spot.
Therefore, if the bank sends a representative to Lima, the individual will have
to the authority to commit the
bank to specific terms. These final matters should be worked out within
the next ten days.
Questions:
1. What are some current issues
Facing Peru? What is the climate for doing business in Peru today?
2. Would the bank be better off
negotiating the loan in New York or in Lima? Why?
END OF SECTION B
Section C:
Applied Theory (30 marks)
· This section
consists of Applied Theory Questions.
· Answer all the
questions.
· Each question
carries 15 marks.
· Detailed
information should form the part of your answer (Word limit 200 to 250 words).
1. Imagine that you are the
director of a major international lending institution supported by funds
from member countries. What one
area in newly industrialized and developing economics would
be your priority for receiving
development aid? Do you suspect that any member country will be
politically opposed to aid in
this area? Why or Why not?
2. The principle problem in
analyzing different forms of export financing is the distribution of risks
between the exporter and the
importer. Analyze the following export financing instruments in this
respect:
(a) Letter of Credit
(b) Cash in advance
(c) Draft
(d) Consignment
(e) Open Account
END OF SECTION C
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